The Empire State Manufacturing Survey indicates that manufacturing activity improved in New York State in December. The general business conditions index rose nine points to 9.5, its highest level since May. The new orders index climbed above zero, to 5.1, and the shipments index advanced eleven points to 20.9. Input price increases steepened, with the prices paid index rising six points to 24.4. Selling prices increased only modestly, with the prices received index inching down to 3.5. Employment indexes were mixed, showing a slight increase in employment levels but a slight decrease in the length of the average workweek. Future indexes rose sharply for a second consecutive month, with the future general business conditions index climbing thirteen points to 52.3, suggesting a return to the high levels of optimism seen earlier in 2011.

In response to a series of supplementary survey questions about changes in input and selling prices, manufacturers predicted that input prices would increase by slightly more in calendar 2012 than in 2011 in some budget categories but by less in others. Prices paid overall were reported to have risen 4.3 percent on average in 2011, and this rate was expected to slow somewhat to 3.5 percent in 2012. Among the broad budget categories, employee beneﬁts showed the steepest price increases—both actual and expected; respondents reported that these costs climbed 7.3 percent, on average, in 2011 and were expected to rise 6.1 percent in 2012. These increases were well below the 10 percent average jump anticipated by respondents in last December’s survey. Wages were expected to climb 2.8 percent on average in 2012. As for expected changes in selling prices, manufacturers foresaw an average increase of 1.8 percent over the next year, down from 3.2 percent in last December’s survey.